Canadian Dollar Falls With Oil as Economic Data Match Forecast

The Canadian dollar fell along with crude oil after a government report showed economic growth in April matched forecasts.

Canada’s gross domestic product expanded 0.1 percent, as projected in the median estimate in a Bloomberg survey of 20 economists. The country’s economy contracted 0.2 percent in March after exports unexpectedly dropped amid falling oil production and investment.  

"The data is relatively subdued, so it’s probably not going to move the needle too much, especially with the month and quarter-end coming up," said Shaun Osborne, chief foreign-exchange strategist at Bank of Nova Scotia. "We continue to see softer crude oil prices slip off the highs above $50 a barrel, so that’s going to hinder any strengthening in the Canadian dollar"

The Canadian dollar dropped 0.1 percent to C$1.2949 as of 8:54 a.m. in Toronto. Crude oil futures fell 2 percent to $48.86 a barrel in New York.

The loonie, as the Canadian dollar is nicknamed, is the second-best performing Group-of-10 currency this year after the yen.

Hedge funds and other large speculators trimmed their net bullish position on the Canadian dollar to 2,595 contracts as of June 21, according to data from the Commodity Futures Trading Commission. These were investors last held net-bearish positions in April.

The Canadian dollar will weaken to C$1.32 by the end of the year, according to the median of 49 forecasts compiled by Bloomberg.

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